are ready, 3, 2, 1, all right? >> 3, 2, 1... [ cheers ] >> thank you very much, everyone. and i think that we will be opening in probably... >> yes? >> we will be opening very, very shortly. one moment please.

>> happy new year. i think it is the year of the dragon, and happy valentine's day. i hope you all remember that today. all right, it is hard to believe -- and somebody may correct me on this. i think this is the 13th year that we have posted this event. think about all the things that

have happened in those 13 years. it was a different mayor that we had. it is a thrill and honor to bring together the mayors of these two great cities to look at the state of the cities and our region. we are delighted to have all of you here to listen, and i think there is well over 600 of you, so thank you for making this your morning. last year was the first time we had these two very special measures -- mayors together as each had just assumed the role. it will be interesting after a year on the job to hear their perspectives, and what a year it has been. we want to congratulate you, mayor lee, on your inauguration and election. and mayor kwan we are so thrilled you are here again.

certainly, both of you have been very preoccupied, so to speak. with many challenges that you really did not foresee that we met last year, and many opportunities as well. our tradition is to alternate this event between the two cities from year to year. last year, we hosted the event in san francisco, which is why we are here at the oakland convention center this year. so thank you for being our gracious host this year. we are delighted that mayor lee traveled across the bay to be here in oakland. doesn't this convention center look fantastic? it has been a great renovation throughout. really terrific asset for this city. i hope your year is off to a

good start. i personally feel rather optimistic as we talk to the many businesses we interact with every day and every week. this morning, we're going to start our program with two speakers who will share information about the economy, the outlook for real estate and investing, and then we will hear from our mayors. it is a great time to be talking about the economy because it at least appears to be getting a little bit better, maybe in fits and starts. we are hearing some good news on the job front -- not nearly enough yet. i will just ask -- who does think that the economy in 2012 will actually be better than 2011? good. that is about maybe half. who thinks that we are lucky to be in the general climate for

business and the regional economy? before we get to our program, i want to thank the organizations and people who made all this possible. i will say now, though, you may have questions that you would like our moderator to ask. if you would like to send them up early, there are index cards at your tables, so just hold your hands up high and somebody will come collect them and give them to our moderator. this event is jointly presented by san francisco business times and our title fund. you will soon hear from our executive vice president and our partner presenting this program. by the way, it was founded in oakland 15 years ago, and they co-founded this with us. we thank our sponsors, starting

with city national bank, which is also a longtime sponsor and partner and provides us with the outlook on investment and finance each year. we want to thank bob grant, the vice-president for city national bank, the nation's 26 largest bank with more than $23 billion in total assets and 79 offices in the bay area, southern california, nevada, an atlanta. they provide their businesses and families with complete financial solutions on the way up. we also want to thank golden gate university, which is also what i'm going to sponsor this event, and an angel, president of golden gate university. you will see him in just a minute. for over 110 years, nonprofit golden gate university has been helping adults achieve their professional goals by providing undergraduate and graduate education in accounting, law,

business, and other related areas. ggu is california's fifth largest nonprofit university, and rolling over five dozen students with over 67,000 alumni. offering weakened forces in downtown san francisco and online through the university's award winning cyber campus -- weekend courses in downtown san francisco. kaiser, founded in 1945, nonprofit integrated health-care organization with physicians, nurses, and staff working in collaboration to provide quality care and address the health care needs of communities served by the organization. kaiser permanente northern california region served almost 3.2 million members, including 5000 positions in the medical group and about 54,000 employees. and the region has 19 major

medical centers. each year, kaiser permanente a donates about $300 million to various community programs in northern california. we also want to thank webcor builders. among the many iconic buildings they have built our oakland pose a beautiful cathedral, the academy of science in sanford cisco. there currently a work on some public projects such as sf general hospital, sfpuc, and the transbay terminal. it has become known for its innovative and efficient approach, wide range of experience, cost-effective design, methodology, skill in construction, expert use of technology in construction, and currently, they are ranked in the top 10 of what does general

contractors in california and consistently ranked in the top five green contractors in the u.s. and longtime sponsor returning again is oakland law firm wendell, rosen, black, and dean. this firm -- we have a lot of long standing firms here. more than 100 years in oakland. continues to be a leader here and throughout the bay area. attorneys have played a role in many construction projects, commercial and residential development and business deals that have helped shape this community. they remind you of the importance of having a complete set of legal tools at your disposal, and the firm hit -- helps a bay area leaders litigation across multiple disciplines. land use, environmental, corporate, i.t., technology, bankruptcy, estate planning --

you got it, they are there for you. thank you. many thanks to our partner in associations to help promote this event. san francisco chamber of commerce, san francisco's center for economic development, oakland metropolitan chamber of commerce, spur, emeryville chamber of commerce, and east bay eba. thank you for partnering with us. i know i will miss some of you, but let me extend a welcome to the public officials that i have been alerted are here. from the city of san francisco, the director of the mta, the executive director of the port of san francisco, the director of the office of economic and workforce development, the director of business development, office of economic workforce development. from the city of oakland, council member, district 5, city administrator, the sick -- the

assistant city administrator, the executive director of the port of oakland, and the chair of the port commission. i know i have missed someone. forgive me. if someone wants to send up a card, i will acknowledge your. there it quickly, just have to mention when i have this many people in the room, a few things about the business. we had a great year. everything that is supposed to be up for us is up. hopefully that is a good economic indicator. we are off to a great start in 2012. hopefully you are a subscriber and read our economic forecast. hopefully you received one or more of our free e-mail products. we just launched a weekly call structures commercial real estate. e-mail news. free every thursday. we will give you an early alert to some of the things in our print edition. you can go online and sign up for any of them. on the print edition, we have

unique premier content that you have to pay for. we are offering a $15 savings on a full year subscription, full access to premium content, and a book of lists, which was just printed. if you want to see our circulation team, leave your card. they will enter you into a contest for a $50 gift certificate, and you will be well armed for doing business in the bay area with all the information we provide every week. hopefully, you are armed already. we do this program every year. also, i was told, if you are tweeting about this program -- i know you all are this morning -- you can do hash tag #sfbtevents and you will be eligible. we have information every day, every week, every hour for you on our website. we do this program every year because we truly love these two

cities. we like to think of the great dynamics between the two of them. we think it is neat that our two mayors are longtime friends and colleagues. that is a wonderful thing, so who knows how much they share and the opportunities and possibilities that come from that. we do know the economic vitality of each city impacts the other, so we will have each major share his or her vision for the future, share their priorities, biggest challenges, and how they are tackling them. what they are doing to improve the business climate and how they are bringing businesses to their cities or preventing them from leaving. and how are they dealing with the loss of redevelopment funding, staff cuts, deficits, and what about those sports teams and stadiums and sailing events? i cannot wait to hear what they have to say. what opportunities exist overseas with china? before we get to the mayor, we

will get some expert insight on the economy, what the realistic outlook is, and a look at finance and investing. are we seeing more green shoots of opportunity? let's begin. the executive vice president has been our partner and has been actively engaged as a broker in the sale and leasing of commercial real estate in san francisco for the past 30 years. he most represented the university of the -- of pacific school of dentistry in the acquisition of their new campus and is handling the current headquarters office expansion for online retail giant macys .com. he is a true expert and knows everything about every building. please welcome dan crestmond. [applause] >> i just have to say the "san francisco business times" is by

far the best source of news anywhere in the area. we go every day now, and maybe every hour and every second soon with all that we are getting in the way of business news. i would also like to welcome a year quan -- mayor quan and mayor lee and thank them for participating in the premiere real-estate event in the area. happy valentine's day, everyone. i like to wish my lovely daughter and my lovely wife, who are here with me today, a happy valentine's day. [applause] and thank you all for climbing out of your tents and sleeping bags to occupy the oakland convention center here this morning at such an early hour. it has been a tough year for the cities of oakland and san francisco. both have been handed some very large lemons to deal with. but before we get a feeling too sorry for ourselves, let's look at someone who has also been

dealt a few lemons -- president obama. he has been dealing with record unemployment, the bankruptcy of general motors, osama bin laden, two wars to clean up. but somehow, in spite of all his problems, he is turning lemons into lemonade. lower unemployment, a new gm, no more osama bin laden, and an imminent end to two very pesky wars, which when complete, will have earned him his nobel peace prize. [applause] so let's start by reviewing the real estate metrics for oakland and san francisco from the past 12 months. vacancies were split in 2011 with san francisco dropping to 12.1%, and the oakland cbd moving up to 16%. in 2012, demand for high-tech space in south of market will lower vacancies to single digits

and will migrate into north of market commodity space such as the linkedin lease just completed at one montgomery. office rents were also split with rates dropping to $28 in oakland and rising to over $40 per square foot in san francisco. rents in san francisco will rise to the $60 or $70 per square foot levels, and it will trigger new office construction for the first time in over four years. oakland, are you listening? investment sales volume in the bay area continue to grow in all product types and rose to over $12 billion in 2011, an increase of 57% from the previous year. projections show an increase of 100% for 2012. the top office leases during the past 12 months in san francisco and oakland -- these experienced office -- rising office activity

with many tenants rushing to lock in long-term rental rates prior to the big increases expected in 2012 and 2013. salesforce continues to be the market maker with a 400,000 square foot lease signed this past january. let's go back to this linen truck -- lenin -- lemon truck and turning lemons into lemonade. san francisco had a few limits handed to it this past year, but in spite of that, the city continues to show us it knows how to make lemonade -- san francisco had a few lemons. an example -- the america's cup. the events for this well- publicized multimillion-dollar america's cup will be held on san francisco bay starting this summer with the grand finale scheduled for september of next year. the port of san francisco is widely using the america's cup as a catalyst for revitalization

of its peers -- piers pierre -- its piers. the $4 billion transbay terminal project is under way with new construction coming under the ground in months. mayor lee, if you think san francisco had lemons this past year, you should talk to mayor quan. here is a lemon. here is another. he is it -- here is an even bigger lemon. it is time to start thinking about making some lemonade. no, required here. here is a more limited with the soon-to-be completed new east span of the bay bridge, which lights up every morning, which i saw this morning as i drove over.

also, to the "new york times, oakland making it to the no. 5 on the "new york times" top 45 places to go in 2012 list. [applause] open's revival of its uptown district by restoring the historic box theater and the magnificent paramount theater for future and current generations. adding thousands of residential units to the urban marketplace with the housing plan and revitalize nightlife with sophisticated clubs and restaurants. and kaiser permanente at a close to 600 beds to the much-needed stock of medical facilities in oakland. let's also talk about a few trends occurring in the marketplace. rolling office space is where office rent is being measured in price per gallon compared price per foot. over 6000 employees per day or 1.5 million people per year are being shuttled in wifi-enabled

rolling offices. this trend will continue in a big way. also, old vacant buildings are taking a new life as tenants and owners occupied newly clad and newly refurbished offices, such as a river bed and the university of the pacific's school of dentistry. another trend -- here is a new leader had warehouse located two blocks from san francisco's brewery at 16th and wisconsin. the graffiti artist who did this is now a facebook millionaire. thanks to bad boy billionaire is mark zuckerberg and sean parker who recently parted here recentlysnoop dogg -- party -- partied here with snoop dogg.

the neighborhood is full of adventurous young techies putting up games at zynga headquarters or mobile apps. another trend we are seeing is the technology side we all know and read about, but what you see here are nine buildings in san francisco as an example of over 3.5 million square feet. these were nine predominantly empty buildings, all of which now are committed by new technology tenants, all within the last 12 months. here are five entitled office projects, representing 1.5 million square feet. with increasing rents, many of these will break ground in 2012 but will not be delivered to the market until late 2014 or 2015. so as san francisco waits for this new office space to believe its pending overcrowding, the

growing firms we read about every day will have no where to call home. oakland, it is time to get ready for the next generation of occupiers -- the office- occupying, rent-paying occupiers. [applause] so throw out the welcome mat and dust off home plate because there is sure to be some big pop flies coming your way. thank you, mayor quan and mayor lee, and do not forget to bring some ice. thank you. [applause] >> thank you, dan. we know oakland is home to some great technology companies like pandora, so the table is set with the excitement happening in oakland as well. now, they look at the financial outlook. we are delighted to have the senior vice president and

director of fixed income investments for citi national. he is in charge of the investment advisory group and has been with the bank since 2003. they provide custom portfolio management and expertise in investment to individuals, firms, and municipalities. he's been managing investment portfolios for more than 30 years, focusing on mutual funds in particular of high net worth individuals, and the authors the bank's weekly economic reports and commentary. please welcome paul single. [applause] >> good morning, all. it is a great turnout did. it is great to see you all. it is an honor to be here with both of you. i would like to spend a little time here today talking about what is going on in the global economy, what are some investment opportunities, and some of the risks out there for a lot of people in terms of how

they are looking at their investment portfolio. quickly, the united states economy is gaining momentum. it is on a nice, a ford trajectory. last quarter put the gdp number was the strongest of the last year, and it looks like that will continue to do better going forward. a couple of other things that are of concern i will go through quickly. the next one is that the austerity plan is going on in europe will probably cause a recession if europe is not already in a recession. china needs to avoid a hard landing, and i will talk about those topics in a little more detail. the next board is the politicians in washington really need to expend the stimulus plan they have in front of them in terms of extending unemployment benefits and the tax cuts. the u.s. economy is doing better, but it still needs the stimulus to keep going. finally, the unemployment rate is still uncomfortably high. it has come down to 8.3%, down from the 10% level. in california, it is 11.1%, down

from the recent high of 12.5%, but it needs to do better. our outlook on the economy is that it is sunny with partly cloudy, but the united states is probably the most important part of this outlook. it is doing well. the chart here showing gdp growth -- this is a measurement of the economic output in the united states, the broadest measure we have. if you follow the red line, you can see that the year-over-year change is starting to trend upward. green columns represent the quarterly change. blue columns represent the market expectations of the future. all this makes it easier for comparison, but you can see we are continuing to move somewhere between 2% and 2.5% growth. a, an analogy would be like a car in second gear trying to get in the third. we will get to our destination, but it will take a little bit slower. this is not uncommon. the credit crisis started just five years ago. last week was the anniversary.

hsbc had to announce that they had to restate previous year's earnings because of losses in subprime loans. no one knew what a subprime loan was. everyone now has opinions on it, but that is the start of it. the recession we had was extremely severe, and it was a financial recession, and it takes a long time to recover out of them, but we are on the right trajectory, and that is the important thing in terms of the outlook for this economy. inflation -- this chart is the consumer price index, the broadest measure of inflation, and it goes back to 1975. many of you in you may remember the very high levels of inflation we had then. now, it is down around 2%. this is a level that is acceptable for the federal reserve bank, and it allows them to use their tools to try to stimulate the economy because

they do not have to use those tools to try to fight inflation, but this is the concern -- housing. i love the start because it puts in perspective how bad the housing market was affected in this economy. the overall economy is the green line, and it measures the change in the drop of the economy from the recent peak. it dropped about 6%. now, look at the red line. that is the housing market. you can see how badly that was impacted, and it has not recovered yet. the economy has recovered. we are at a point of economic growth higher than we were before the recession started, but in housing, that is not the case. and housing employs a lot of people, and that is part of why this recovery has been so slow. china -- this is a big deal. if you take a look at the global economy, the g-20, the eminent group of finance ministers, the united states is number one. we are the largest economy in th